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Targeted Financial Sanctions

TFS are both asset freezing and prohibitions measures taken without delay to prevent funds or other assets from being made available, directly or indirectly, for the benefit of entities or persons subject to sanctions.

The UN Sanctions List, is a list established by the United Nations Security Council comprising of the names of the listed parties which are subject to UN Sanctions.

 

The United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Act 2019 (‘UNSA  2019’), provides the legal framework for implementing targeted sanctions, including financial sanctions, arms embargo and travel ban, and other measures imposed by the United Nations Security Council.

The UNSA 2019 provides for the imposition of sanctions on both Listed Parties and Designated Parties.

A “listed party” is a party which is listed by or under the authority of the United Nations Security Council.

A “designated party” is a party declared as such by the Secretary for Home Affairs under section 9 or 10 of the UNSA 2019.

As a Reporting person, you have to:

   a) Comply with prohibitions under the UNSA 2019;

   b) Implement internal controls and other procedures;

   c) Screen all customers and transactions against the UN Consolidated sanctions list;

   d) Make a report to the National Sanctions Committee (NSS) and your AML/CFT Supervisor

  e) In case of match, file a Suspicious Transaction Report (STR) to the FIU

You may consult the following documents for more information:

FIU video presentation on Targeted Financial Sanctions Overview and Obligations under the United Nations Sanctions Act 2019

Guidelines on the Implementation of Targeted Financial Sanctions under the UNSA 2019

The following targeted sanctions shall apply immediately and shall continue to apply for as long as the party remains listed on the relevant United Nations Sanctions List or remains a designated party:

   i. the prohibition to deal with funds or other assets of a listed party or designated party

   ii. the prohibition on making funds or other assets available to a listed party or designated party

   iii. arms embargo

   iv. travel ban

As a reporting person, you should ensure that you have access to up-to-date sanctions lists and that you regularly screen your client databases against the UNSC Consolidated List. Appropriate systems should also be put in place to ensure reporting obligations are met.

As of July 2022, the Secretary of Home Affairs has not declared any party as “Designated Party”.  In case of declaration of a designated party, the National Sanctions Secretariat shall give public notice in such a manner as may be determined by the National Sanctions Committee.

You should conduct the screening upon any change to the UN Consolidated Sanctions List. As there are occasional changes in the list, the onus is on you to ensure that you make use of the most recent list. The screening must be conducted immediately and without delay (within 24 hours) such that reporting is done within 24 hours.

Screening should also be done at the time of establishing a business relationship, at regular intervals and upon trigger events (change in directors or ownership). Screening records must be properly documented.

Manual Screening is allowed based on the size, scale and complexity of the business.

The FIU has published a presentation on How to conduct sanctions screening explaining one way to conduct manual screening.

There is no minimum financial limit or no other threshold applicable to conduct TFS screening. Screening should be conducted whenever there is a change in the relevant sanctions lists.

No, you are required to conduct TFS screening prior to establishing any relationship with the client.

TFS screening must be conducted whenever there is any change to the list. This includes additions, extensions, removals, exemptions or any other amendments.

A reporting person is required to search for their clients against the lists provided.  There are several search criteria that can be used to assist in narrowing down the search results.  These include, among other, the following:

  • Name
  • Surname
  • Date of Birth
  • Nationality
  • Identifying number
  • Aliases

The reporting person will be required to ensure that they complete as much information as possible in the search fields. It is the responsibility of the reporting person to review the search results and to decide as to the validity thereof.

When NO match has been found, you need to ensure that you keep evidence (records) of your screenings.

If the screening is conducted further to changes in the UN Consolidated Sanction List and NO Match found, a reporting person shall notify its AML/CFT supervisor through a nil report.  Screening records must be well documented

  1. When a true match has been identified, the reporting person should immediately report it to the NSS (on nssec@govmu.org) and to its AML/CFT Supervisor. The following template should be used to report a positive match.

Template for Reporting on Positive Match under section 25(2) of the United Sanctions Act  

  1. The reporting person is also required to identify whether the client has any funds or other assets in Mauritius and to make a report to the NSS and to its AML/CFT supervisor where funds or other assets have been found and also in cases where funds or other assets have not been found. The following template should be used to report.

Template for Notification to the NSSec under section 23(4) of the UN Sanctions Act 2019

  1.  In addition, a reporting person should immediately submit a Suspicious Transaction Report (STR) to the FIU on any information related to a designated party or listed party. The STR reporting should to be done through the goAML platform. Any other person, should report to the FIU in writing. (email address)

Reporting persons are reminded that it is an obligation to register with the FIU as per Section 14C of FIAMLA.

If you identify any information relating to a designated or listed person, and you are not a reporting person, then you must report it by sending an email to fiu@fiumauritius.org with all details and all supporting documentation.

You are required to file reports without delay and not later than 24 hours.

A Suspicious Transaction Report relating to a designated or listed party should be filed within 24 hours as per the Section 39 of the UNSA 2019.

Suspicious Transaction Report and Money Laundering Reporting Officer

A Suspicious Transaction is defined under the FIAMLA as a transaction which:

(a) gives rise to a reasonable suspicion that it may involve:

(i) the laundering of money or the proceeds of any crime; or

(ii) funds linked or related to, or to be used for, the financing of terrorism or proliferation financing or, any other activities or transaction related to terrorism as specified in the Prevention of Terrorism Act or under any other enactment, whether or not the funds represent the proceeds of a crime;

(b) is made in circumstances of unusual or unjustified complexity;

(c) appears to have no economic justification or lawful objective;

(d)is made by or on behalf of a person whose identity has not been established to the satisfaction of the person with whom the transaction is made; or

(e) gives rise to suspicion for any other reason.

You are encouraged to submit a STR as soon as possible but not later than 5 working days after the suspicion arose. The 5 working days exclude Saturdays, Sundays and Public holidays and run from the time the suspicion is formed.

Failure to report STRs is a criminal offence and on conviction, Reporting persons are liable to a fine not exceeding 1 million rupees and to imprisonment for a term not exceeding 5 years.

The Money Laundering Reporting Officer (MLRO)/Deputy Money Laundering Reporting Officer (DMLRO) appointed in line with Regulation 26 of the FIAMLR 2018 is responsible to assess internal suspicious transaction report and file STRs to the FIU.

Where a reporting person is unable to appoint a MLRO due to the size or nature of its business or activity, then the reporting person (sole director) himself/herself should act as the MLRO and should establish, maintain and operate reporting and disclosure procedures.

The outsourcing of MLROs is not permitted by our laws.

The duties and responsibilities of the MLRO are to, amongst others,

  • Ensure that any internal disclosures of suspicious transactions are made to him;
  • Consider any information available for determining whether or not it gives rise to any knowledge or suspicion of ML/TF;
  • Determine if there are grounds to submit a Suspicious Transaction Report (STR) to the FIU;
  • Act as a key liaison point with the FIU and other law enforcement authorities;
  • Have unrestricted access to information that may be of assistance in the discharge of his/her duties;
  • File Suspicious Transactions Reports (STR) to the FIU;
  • Have direct access to the board of directors of the reporting person.

A suspicious transaction report (STR) should be submitted to the FIU electronically through the goAML platform. In exceptional cases, manual STR can be filed using the prescribed form. (Contact goAML helpdesk for assistance)

You can refer to the goAML Web User Guide, the Guidance Note 4-Suspicious Transaction Report,  the goAML User Guide (STR Scenarios) 2019 and video tutorials on the GoAML platform for the filing of STR.

Every reporting person who has an obligation to make a report to the FIU under section 14 of the FIAMLA 2002, shall  register on the goAML Platform.

Each reporting person will register its organisation only once on the goAML Platform, unless the registration was rejected.

The Reporting Persons must select “Register as Organisation” from the goAML Home page.

Please refer to Section 1.2 of the goAML Web User’s Guide: Chapter 1 – Registration (available on goAML Home page).

A user (other than the MLRO/ Admin) can register on goAML only after the registration of its organisation has been activated by its Supervisory Body.

The user must select “Register as Person” from the goAML Home page and register with the correct Organisation ID.

Please refer to Section 1.3 of the goAML Web User’s Guide: Chapter 1 – Registration (available on goAML Home page)

This is the Tax Account Number (TAN) number of the organisation.

In this case, in addition to follow up with the supervisory body, the Reporting institution shall seek the assistance of the FIU’s goAML Helpdesk by email (goamlhelpdesk@fiumauritius.org).

In this case, the new MLRO is requested to follow the below steps:

  1. Inform the FIU’s goAML Helpdesk via a letter or email that:

               (i) he/she is the new MLRO of the organisation;

               (ii) no handing over was done by former MLRO; and

               (iii) there is no admin user for their organisation.

  1. Register himself/herself as a user under his/her organisation (with the correct Organisation ID) and attach a letter (with the information under 1. above) along with a copy of NIC or passport.
  2. Any assistance, contact goAml helpdesk. (goamlhelpdesk@fiumauritius.org)

Reporting persons are however reminded that, to prevent such continuity issues, they are strongly recommended to put in place proper handing over procedures for all their users linked to their goAML accounts.

Once an STR is submitted, the user will receive a notification (through the email registered for the Organisation) that a report has been submitted. Any acceptance or rejection, a notification will be sent on your registered email.

As per section 16 (1) FIAMLA, Tipping off is the act of disclosing to any person that a suspicious transaction report is being or has been filed, or that related information is being or has been requested by, furnished or submitted to FIU.

Tipping off is a criminal offence and on conviction Reporting persons are liable to a fine not exceeding 5 million rupees and to imprisonment for a term not exceeding 10 years.

Independent AML/CFT Audit

An independent AML/CFT audit refers to an independent review or assessment of a reporting person’s risk-based AML/CFT framework. It assesses whether the provisions of the FIAMLA and FIAMLR are being complied with by the reporting person and allows the reporting person to ascertain and assess the proper functioning of its risk-based AML/CFT framework over a specified period and make any required changes.

Yes, it is mandatory for reporting persons to conduct an independent AML/CFT audit.

Pursuant to Regulation 22(1)(d) of the Financial Intelligence and Anti-Money Laundering Regulations 2018 (‘FIAMLR’), a reporting person should carry out an independent audit to review and verify compliance with and effectiveness of the measures taken in accordance with the Financial Intelligence and Anti-Money Laundering Act (‘FIAMLA’) and regulations.

The independent AML/CFT audit enables the reporting person to evaluate the practical efficiency of its risk-based AML/CFT programme and determine whether the risk-based policies, controls and procedures in place are based on the money laundering and financing terrorism & proliferation risks identified by the reporting person and whether they are adequate and effective in mitigating the risks.

A person who is suitably qualified, understands the sector of the reporting person and has audit experience can conduct the AML/CFT audit. This does not necessarily mean the person has to be a chartered accountant or qualified to undertake financial audits. However, he/she must be independent, and not involved in the development of the risk assessment, or the establishment, implementation, or maintenance of the AML/CFT programme of the reporting person.

No. Currently, there is no list of recommended auditors for independent AML/CFT audits. It is for the reporting person to determine who is considered independent and has the appropriate qualifications and experience to conduct the AML/CFT audit.

It is for the reporting person to apply a risk-based approach to determine the frequency of the independent AML/CFT audit. In some instances, there will be regulatory bodies which might prescribe the minimum frequency of the independent AML/CFT audit and this can vary from every 1-3 years. Nevertheless, the scope of the independent audit needs to be risk based and agreed between the reporting person and the auditor.

No, the Financial audit is not the same as independent AML/CFT audit.

A Financial audit is an independent review and evaluation of completeness and accuracy of an organisation’s financial accounts while an AML/CFT audit is a review and evaluation of the adequacy and effectiveness of an organisation’s AML/CFT framework.

A documented detailed report from the auditor to the reporting person as to whether the reporting person meets the minimum requirements for its risk assessment and AML/CFT programme, whether the AML/CFT programme was adequate and effective throughout the specified period and whether any changes are required.

No, the auditor must be independent, and not involved in the development of the risk assessment, or the establishment, implementation, or maintenance of the AML/CFT programme of the reporting person.

A reporting person’s own (internal) review is a process that he/she/the compliance team (MLRO & Compliance Officer) carries out to ensure that the risk assessment and AML/CFT programme are up to date and to help the organisation identify and remedy any areas of deficiency.

The independent AML/CFT audit is a systematic check, by the internal auditor or an external auditor, of reporting person’s risk assessment and AML/CFT programme, and the application of said programme.

A desk-based or onsite inspections by the regulatory body is to check that the reporting person has adopted a risk-based AML/CFT programme that meet the requirements of the AML/CFT laws and regulations of the country and are being effectively implemented within the business’ operations. To note that a desk-based review or onsite inspections by the regulatory body is not considered a substitute for conducting an independent AML/CFT audit or internal review.

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